Compute the npv irr pi the payback periods and the

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Compute the NPV, IRR, PI, the payback periods, and the discounted payback periods for the following projects. Assume a discount rate of 11 percent.

Project	C0	C1	C2	C3	C4	C5
A	-1,000	400	400	400	500	500
B	-6,000	1,500	1,500	1,500	1,500	1,500
C	-17,000	0	0	0	24,200	8,200

A and B are mutually exclusive projects. Project A requires an initial outlay of $80,000 and generates cash flows of $18,000 per year for 8 years. Project B requires an outlay of $40,000 and generates cash flows of $10,000 per year for 8 years. Compute the NPV and IRR for each of the two projects. Assume that the discount rate is 10%. Which project would you select and why?

Reference no: EM13371088

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